SMRT Higher Operating Costs Continue to Erode Profits

“We are fully committed to strengthening the level of service and reliability of our public transport services and meeting the network’s higher capacity needs and operational requirements. We remain focused on our multi-year programmes to renew and upgrade the ageing rail network and will continue to pursue business growth in line with our core competencies.”

SMRT’s President and Group Chief Executive Officer, Mr Desmond Kuek

SMRT announces its 2Q FY2016 results on 27th October 2015. The group revenue increased 4.7% to $328.8 million. Operating expenses rose 7.1% to $313.6 million. The increase in operating expenses was due mainly to higher repairs and maintenance costs, staff costs, depreciation, and other operating expenses. Operating profit was $32.5 million which is 2.4% lower as compared to 2Q FY2015.

SMRT business can be grouped into Fare Business and Non-Fare Business.

Fare Business

The Group’s overall fare business recorded an operating loss of $1.4 million in 2Q FY2016, compared to a profit of $5.5 million in the previous corresponding period.

The fare business consists of revenue from:

Train

LRT

Bus operations

Non-Fare Business

Profit from non-fare business increased by 21.7% to $33.1 million in 2Q FY2016.

The non-fare business consists of revenue from

Taxi

Rental (Kallang Wave Mall)

Advertising

Engineering services

Other services.

Dividend

An interim dividend of 1.5 cents per ordinary share.

Rail Financing Framework

The media release mention that SMRT is making progress on the discussions on the new rail financing framework. However, no further details are presented in the news release.